Peace Of Mind For Your Family And Your Future

Can I transfer assets to protect them from Medicaid?

On Behalf of | Sep 14, 2019 | Medicaid asset protection

Many adults in Delaware are looking to Medicaid to help them defray the costs of long-term care. It is a reality that life spans are extending across the United States, and many senior citizens are finding it necessary to move to an assisted living home or hire in-home care. However, this can be prohibitively expensive for many people, even if they have a considerable amount in escrow or savings. Because of this, many seniors consider divesting themselves of their assets to protect them from Medicaid. However, according to Aging Care, transferring wealth to friends or family for this purpose is risky.

The purpose behind wealth transfer in this case is obvious: you want to protect your wealth and give it to your friends and family, not have it end up in the coffers of an assisted living home. However, you need to be aware of the inherent risks of trying to transfer your wealth away in hopes of being approved for Medicaid assistance where assisted living is concerned.

Namely, when you apply for Medicaid, your financial history is subject to a “look back” period where Medicaid does research on where you have spent your money. There are, of course, certain sanctioned expenses where you can “spend down” to increase your Medicaid eligibility, but gifting money to friends and family is not one of these expenses.

In the event that Medicaid can prove you are trying to offload funds in order to have Medicaid cover the cost of long-term care, Medicaid may not approve you.

Many seniors use an asset protection trust or income trust to offload wealth in a legal way that may not be subject to the “look back” period, instead.